How to Find Affordable High Risk Life Insurance

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jun 29, 2022

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Life insurance companies make money by collecting premium payments and not paying out death benefits, which means they commonly avoid high risk consumers. In order to determine who will get life insurance, companies have developed underwriting criteria that indicate how much of a risk an applicant is. Most life insurance applicants are required to undergo a medical exam so the insurance company can find any high risk health concerns. If you fall in the category of high risk life insurance because of an illness or unhealthy lifestyle, then you may be rejected by a life insurance company, or see higher premium rates.

TIP: If you are high risk, it is important to shop around. While all companies may charge you more because of your risk level, you may be able to find a good life insurance policy at an affordable price if you take the time to look for one.

Life Insurance Underwriting

Life insurance companies generally underwrite individual applicants for life insurance policies. The underwriting process is designed to screen out people who are uninsurable due to serious illness or extreme health risk, and classify the remaining people into risk categories depending on how healthy they are and charge them premiums accordingly. A healthy 35 year old who weighs 150 pounds can expect to pay significantly less than a 35 year old who has diabetes and weighs 300 pounds.

The underwriting process can be very simple. For certain policies it may just consist of a few questions about gender, age, weight, your smoking habits and health history. If you are able to demonstrate that you are healthy and do not engage in dangerous or unhealthy activities then you will be placed in a lower risk category. However, if you are not healthy or engage in dangerous activities, then the insurance company underwriting will place you in a high risk category and make it difficult for you to get insured at a low price.

Evaluation and underwriting of risks varies differently for each company and from person to person. For this reason, you should always shop around and compare life insurance quotes, and ask an experienced agent should you have any questions.

Life Insurance for the High Risk

Some companies are comfortable taking in people who are less than perfectly healthy and take in a range of risks. Such companies may promise guaranteed high risk life insurance despite your health problems. These companies will usually have a limit on how much insurance you can purchase, and their rates tend to be high. Also, the policy may be limited to refund of premiums and interest only if death occurs during a few years after the insurance is purchased.

TIP: Companies offering high risk life insurance policies will charge higher premiums, but are sometimes the only source of coverage you need. Shop around and consult a life insurance agent to find the best high risk company for your situation.

Whether you are applying to a company specializing in high risk policies, or in any company advertising low life insurance, be sure you are likely to be accepted at the affordable rates before you apply! A rejection on a life insurance application could come back to haunt you. Just applying to a company that claims to have the lowest price is usually NOT the answer. If that company does not accept you or rates your policy as non-standard then it may harm you when you apply to another company. Other insurance companies will know if you have applied for life insurance, and each application is a red flag that can cause your premium rates to increase.

TIP: When you apply for life insurance most companies ask if you have ever been denied or rated on a life insurance policy. A false statement makes any policy that is issued contestable for at least 2 years, and it is not hard for your company to find a previous application.

Before you apply for high risk life insurance, speak with a good insurance agent or broker who specializes in dealing with people who have problems obtaining life insurance coverage. He or she should be able to recommend a company that has a favorable view of people with your health condition.

What You Can Do to Get High Risk Life Insurance Coverage

Whether you are looking for life insurance for a smoker, or if you have a history of cancer and life insurance has been hard to obtain, there are some things you can do.

  • See if you are automatically eligible for group life coverage through your employer or an organization you belong to. Group coverage is sometimes issued without any individual underwriting; the insurance company relies on the general experience of the whole group. Very often, group plans permit people to buy up to a fixed amount without any evidence of insurability. If so, buy as much as you need and can afford.
  • Consider a permanent life insurance plan, such as whole life or universal life. Life companies often are more liberal in terms of underwriting on permanent insurance than on term life insurance.
  • See if you are eligible for any other form of life insurance that does not require underwriting. Such policies generally are awful, with low benefits and high premiums, the premiums usually are very high, but even though there may be a 2 year waiting period before your beneficiaries would be able to collect anything more than the premium you paid in, these policies may make sense for those who can’t get life insurance. Some of these polices are called burial policies or final expense policies and offer small face value amounts. But, if you can’t get life insurance any other place, these policies could be an option.
  • Consider buying Accidental Death and Dismemberment Insurance (AD&D). AD&D covers only deaths that result from accidents, but that may be better than nothing.
  • Consider certain types of credit card insurance — the cost is normally outrageously high, but it does offer an alternative.
  • Consider going without life insurance. Save the money you would have paid as premiums to build a nest egg for your survivors.
  • Do what you can do to address the health concerns that caused you to be denied insurance. That may involve weight loss, exercise, diet, smoking cessation, etc.
  • Consider reapplying after you have addressed the health concerns or time has passed. Someone who may not have been insurable at age 40 because of a recent cancer diagnosis may become insurable at 45 if there is no recurrence. Even if you have been turned down for life insurance because you had a terminal illness eight year ago but now you are considered cured, you can still try other companies.

If you think you can’t get life insurance, you should take the time to thoroughly search your options. Each life insurance company has its own standards for underwriting. While one company might turn you down or deny you, another may approve you. Or could put you at a higher charge of a sub standard rate and another might charge at standard rate. Fortunately, since there are thousands of companies in this business, you have a good possibility of finding one that will cover you. Visit the Free Advice life insurance quote center to obtain a quote on high risk life insurance.

Read more articles to help you understand life insurance by clicking here.

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